San Diego ousted Houston as the most philanthropic city in the United States, according to latest Metro Market Study released by nonprofit charity evaluator Charity Navigator.
The annual study compares the median performance and size of the largest nonprofits in the 30 largest metropolitan markets, which account for 62 percent of the 8,219 charities evaluated by the Glen Rock, N.J.-based nonprofit.
For overall financial health and commitment to accountability and transparency, three cities scored better than 90: San Diego, 90.10, which finished tied for No. 4 in last year’s study; Houston, 90.05, which was No. 1 last year, and St. Louis, 90.03, which was No. 2 in 2016. Rounding out the top five were Tampa-St. Petersburg, 89.51, which finished third last year, and Dallas, 89.39, which tied with San Diego in the previous year.
In addition to overall score, the study provides rating dimensions for Financial Score and Accountability & Transparency Score, which examine almost two dozen metrics, ranging from program and administrative expenses to donor privacy policies, and contributions and revenue, as well as CEO compensation, among other things.
Regional factors including cost of living, a market’s maturity and a city’s tendency to support one or two specialized causes, influence the ability of charities in each city to raise money, manage costs and adhere to good governance policies and procedures, according to the study.
“The consistence performance of charities in cities like San Diego and Houston is commendable. But our study reveals that it isn’t just a few philanthropic communities that stand out,” Charity Navigator President and CEO Michael Thatcher said. “We’ve found that the nonprofit sector throughout America is strong and diverse — a testament to the dedication and hard work of donors and philanthropic leaders across our nation,” he said via a press release announcing the study’s findings.
Charity Navigator calculated the median value of financial variables and the percentage of compliance from data obtained from charities’ Forms 990 to determine accountability & transparency metrics. In the 13 years of the study, Houston has ranked first five times and has ranked lower than fifth only once.
Charities in Baltimore had the highest median total assets at $12.4 million, compared with a national median of $6 million, and the lowest of $2.99 million in Colorado Springs. Among other findings noted in the study:
- Charity executives in Washington, D.C. ($181,488) and New York City ($176,022) earn considerably more than those in Colorado Springs ($108,229) and Seattle ($113,323);
- New York City (967 large charities) and Washington, D.C. (715) are more crowded and competitive philanthropic markets than Colorado Springs (45) and Orlando (53);
- Donors to charities in Houston ($4.3 million) and Washington, D.C. ($4.047 million) and Los Angeles ($4.003 million) report the highest median contributions while those in Philadelphia ($2.3 million) and Boston ($2.5 million) and Minneapolis-St. Paul ($2.6 million) report the lowest.
- The largest charities in St. Louis are generally richer in working capital and have lower liability-to-asset ratios than charities in other parts of the country, while charities in Colorado Springs are less financially secure;
- Cleveland charities scored highest for overall financial health (89.25) while on the other side of the spectrum, those in Colorado Springs scored lowest (84.2). The national median was 87.18.
- Highest scores for being accountable and transparent (96.0) went to charities in Houston, Phoenix, San Diego, Portland, Kansas City and Tampa-St. Petersburg while the lowest scores (89.0) were found in Nashville, Cincinnati, Pittsburgh and Cleveland. The national median was 92.00.
- Phoenix had the highest percentage of charities with written donor privacy policies at 59 percent while Cleveland had the lowest (29 percent). Privacy policies state that the charity will not sell, trade or share its donors’ personal information with anyone else, or send mailings on behalf of other organizations.
- Los Angeles charities are more rapidly expanding programs (6 percent) than charities in Indianapolis (1.8 percent);
- Charities in Orlando (85 percent) devote the largest percentage to spending on programs and services and the lowest on fundraising expenses (6 percent) while Boston charities spend the least (79 percent) on program. Denver and Seattle both had the highest level of fundraising expenses (9.2 percent). The national median was 7.9 percent.
The largest percentage of charities by type were found in the following metro areas:
- Human services (46 percent) – St. Louis
- Religion (36 percent) – Colorado Springs
- International (20 percent) – Colorado Springs
- Arts, culture and humanities (23 percent) – Cincinnati
- Health (19 percent) – Tampa-St. Petersburg
- Community development (19 percent) – Cleveland
- Education (12 percent) – Indianapolis
- Human and civil rights (16 percent) – Washington, D.C
- Animal (11 percent) – Tampa-St. Petersburg
- Research and public policy (11 percent) – Washington, D.C
- Environment (11 percent) – San Francisco